3Q FY2013 Earnings Release Conference Q&A

Could you breakdown your October-December 2012 order results by region and application? Could you also provide details on your post-sales orders and orders at companies TEL acquired in the current fiscal year?

In terms of region, third-quarter orders from the United States and Taiwan increased strongly. In terms of application, orders from foundries and MPU and other logic manufacturers increased. Quarterly post-sales orders totaled 28 billion yen, and orders at the acquired companies NEXX systems and FSI International were less than 5 billion yen in total.

What is your orders forecast for January-March 2013, including order trends by application?

We do not feel certain that fourth-quarter orders will exceed the third-quarter level. The lead time from order to delivery is getting shorter, which makes it difficult to make accurate forecasts. For FPD/PV orders, we forecast an increase in orders based on the current level of inquiries from FPD manufacturers in China.

What is your orders forecast for April-June 2013 and beyond?

We believe the market correction will continue during the first half of 2013.

What is your financial forecast for the fiscal year ending March 2014? What is your cost-reduction plan?

We forecast a recovery in memory investment in the second-half of the year, though at the present time we do not expect a robust recovery. Regarding cost reductions in FY2014, we plan to reduce fixed costs by 10 billion yen compared with the current fiscal year, excluding plans at the four companies we acquired this fiscal year.

What is your profit outlook for the PV business for FY2014?

There is a possibility of the loss before amortization of goodwill will be in the several-billion-yen range. We will develop a more precise budget which takes into account projects under construction and new projects.

What is the order trend for the PV business?

There are multiple inquiries from customers in China, Southeast Asia, the Middle East and other regions. Since the price decline for crystalline silicon solar panels has leveled off, we expect interest in thin-film silicon solar panels to increase.

Please explain the increase in inventory turnover in October-December 2012.

The main reasons were the October-December sales decline and the increase in goods-in-process to be shipped between January-March.

What is the impact of the yen depreciation on your business?

There is no direct impact because our equipment sales contracts are yen-denominated. Over the medium term, however, we believe the yen depreciation will make us more price-competitive with U.S. equipment manufacturers.

Do you plan to continue your policy of linking dividends to financial performance in FY2014, with a payout target of 35%, or is there a possibility you will adopt a stable payment policy?

We have no plan to change our dividend policy. In this fiscal year the dividend is meant to commemorate our 50th anniversary, so we will maintain our dividend despite the downward revision to our earnings forecast.